Government Bytes


The States Can't Afford ObamaCare

by John Stephenson / /

Today’s Wall StreetJournal (subscription required) features an interesting op-ed by George Melloan, a former columnist anddeputy editor of the editorial page. In it, Melloan argues that one of the economicrealities behind the lawsuit by 26 states against the Obamaadministration’s health care “reform” law is that the states simply cannotafford it.


Melloan explains: “Thanksto the recession and their own spending excesses, nearly all states aresuffering budget shortfalls, some to the point where there is no clear ideawhere the money will come from to meet pension and bond obligations, let aloneoperating expenses. The prospect of adding a further huge burden down the line,even with Washington kicking in over half the cost, is appalling.”


“The 26 states party to the Florida suit were saying, inessence: enough! Washington can borrow from the Chinese or call on the FederalReserve to buy its bonds. But states' only recourse in a budgetary bind isfurther painful cuts in services.”


For his part, Judge Vinson, the Florida judge who ruledObamacare is an unconstitutional exercise of Congress’ power, did not agreewith the economic argument that costs should be a consideration. Instead,Vinson sided with the government lawyers who argued that since states are freeto withdraw from Medicaid if they so choose, nobody is forcing them to doanything.


But as Melloan points out, “Judge Vinson's ruling[notwithstanding], there is considerable practical merit in the states'position. For one thing, federal taxes levied on the incomes of citizens instates that withdrew would simply go to support Medicaid elsewhere. Thesecitizens would not only get nothing in return for their taxes—they would alsobe stuck with the cost of alternative ways to provide health care for the poor.”


Given the states’ fiscalpositions in the year ahead and the dire choices they face, the argument that Obamacare– and other federal mandates – cost too much could take more precedence in the months ahead. Moreover, more states could also challenge other onerous federal mandates as more costly examples of federal overreach.